Financial news has been filled with news of the recent settlement reached with housing lenders over their unfair foreclosure tactics. While some have lauded this as a way for banks to win over the trust of the public, others have said that it does not go far enough to help Texas families on the verge of foreclosure. Now, government officials are readying themselves to unveil a new set of lending standards to go along with the settlement.

The $26 billion settlement included five of the nation's biggest mortgage lenders. The next phase of the settlement will include reforms intended to help overwhelmed, underwater borrowers attempting to modify their home loans.

One of the biggest issues borrowers have faced is the inability to make contact with their lender when they attempt to modify their home loan. When they do make contact, individuals are often given the run-around and are forced to call someone else. Additionally, there are many redundancies in the modification process, as people are often asked to provide the "same documents again and again."

One of the major promises to come out of the foreclosure settlement is that borrowers will have a single point of contact for loan modification within the lending institution. Last year, mortgage lenders ensured they would streamline the modification process by establishing a single point of contact, but consumer advocates have noted that little has changed in the way lenders operate. Continual promises from lenders have many doubting whether or not the necessary changes will be made.

Being unable to modify a home loan can be very stressful for homeowners, especially if they are close to losing their home. People have so much of their lives tied up in their homes. The stress and emotion of foreclosure is often too much for people to handle. When borrowers are dealing with such an important aspect of their life, the security of their home, they deserve to feel as though their lender understands the urgency of their needs.

Source: The New York Times, "Some Doubt a Settlement Will End Mortgage Ills," Nelson D. Shwartz, Feb. 20, 2012